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Motley Fool Issues Rare “All In” Buy Alert
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What if I told you there was a cryptocurrency out there that is governed by a cohort of Fortune 500 companies like Alphabet and IBM, used for an array of interesting projects and use-cases, and can be bought for just $0.10 per token? And one more thing — it isn’t a blockchain. That’s exactly what Hedera Hashgraph (HBAR -4.26%) is.
Hedera Hashgraph is a distributed ledger of transactions, just like other cryptocurrencies, but Hedera differs from its peers in that it does not use blockchain technology. Hedera instead utilizes a consensus algorithm called a hashgraph, which was developed by its co-founder, computer scientist Leemon Baird. Hashgraph technology is patented, so Hedera is unique in that it is the only cryptocurrency using this technology. In a hashgraph, the different nodes within the network “gossip” to each other to create a time-sequenced record of all transactions.
Image source: Getty Images.
Hedera says that this hashgraph technology is “a faster, more secure alternative to blockchain mechanisms.” Hedera has a throughput of 10,000 transactions per second with finality in a matter of seconds. The other advantage of using Hedera is the low fees — these transactions cost a fraction of a cent. This combination of low cost and impressive performance has attracted many projects to the Hedera ecosystem.
Hedera is supported by a number of large blue-chip companies both from within the tech industry and outside of it. Hedera is overseen by a board of governors that includes executives from tech giants like Alphabet, ServiceNow (NOW -4.76%), and IBM; manufacturers like Boeing and Avery Dennison; and prominent global telecom companies such as Deutsche Telekom and Tata Communications.
Having this armada of Fortune 500 companies on board is all good, but it doesn’t amount to anything if they aren’t developing the project. Cryptocurrency skeptics sometimes say crypto is a “solution looking for a problem.” But Hedera is already being utilized in plenty of real-world use-cases today, and there are already many innovative projects being built on Hedera.
For example, Tune.FM is a streaming service built on Hedera that says it pays artists on its platform up to 90% of streaming revenues. This generous compensation ratio dwarfs the payout of traditional streaming services. Tune.FM used Hedera to mint and issue its JAM tokens, which can be used to compensate artists through micropayments, as well as NFTs that can be used by artists to raise funds and give fans access to unique ownership of artwork or a limited release by a favorite artist. Tune.FM chose to build on Hedera for this project because of its low transaction fees and near-instant settlement times.
Outside the world of music, Neuron is experimenting with using Hedera to track flight information for drones , and Avery Dennison’s atma.io cloud platform is going to work with Hedera to help companies track the carbon footprint of their products across their life cycle using distributed ledger technology.
Thanks to both its approach to consensus and its governing council stacked with industry-leading companies and the fact that it already seems to be gaining traction across a wide array of industries, Hedera holds a unique position within the crypto space. That’s why I view Hedera as a good addition to a long-term cryptocurrency portfolio for risk-tolerant investors.
It is important to note that we are still in the very early stages of cryptocurrency adoption, so this will likely be a volatile, high-risk, high-reward investment. It is unclear who the winners and losers will be. However, based on its bona fides, I think Hedera is a solid choice to include in a basket of cryptos that could one day be much larger than they are today.
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